Robert Samuelson: Globalization’s Real Story

Saying Bob Samuelson got it right again is like saying the New England Patriots scored another touchdown – you can only yawn and ask, “What else is new?”

In today’s column, “A Villain to our Rescue,” Samuelson lays out the story of world trade and its impact on the U.S. economy. Yes, we have a huge trade deficit but it is coming down. At a critical time, when the housing meltdown threatens to send our economy into a tailspin and the U.S. consumption machine is faltering, exports are picking up the slack and keeping the economy growing. This is the way free trade is supposed to work and its benefits are abundantly clear.

But as Bob notes in his close:

All the ritualistic denunciations of globalization are not harmless. Psychology matters. If global investors fear that the United States might make its economy less open to foreign trade and investment, the result may be the dollar panic that everyone fears. The dollar’s status as the world’s central international currency depends on its usefulness in buying and selling. The more we restrict, the less useful it becomes. Globalization’s casual bashers should remember that. They think they’re playing only to a domestic audience, but the world is listening, and it may not like what it hears.